Rates Under Pressure Again Following Jobless Claims Data
Posted 12-31-2009 at 07:54 AM by VictorBurek
Yesterday, the prices of mortgage backed securities managed to hold onto the gains from the prior day. MBS were unable to extend the gains even after the Department of Treasury successfully held their last debt offering of the year which saw very good demand. The sideways trading left mortgage rates unchanged on the day.
The fixed income market is set for an early close today at 2pm eastern and will be closed all of tomorrow in celebration of the New Year.
The final piece of economic data comes from the Department of Labor with the release of the weekly jobless claims. This report totals the number of Americans that filed for first time unemployment benefit in the prior week. Included within this report are two other measures, continuing claims and extended benefits claims. Continuing claims totals the number of Americans that continue to file for unemployment benefits due to a lack of finding a new job. The extended benefits claims totals the number of Americans who’ve used up their traditional benefits and are now collecting extended payments under recent government stimulus programs. Recent reports have shown both the initial claims and continuing claims falling while the extended benefits measure continues to rise. After peaking over 650,000 first time claims in March of this year, initial claims have steady improved falling to only 452,000 two weeks ago. Economists surveyed expect a slight increase in claims to 455,000 for last week.
The release indicated the number of Americans that filed for first time claims during the Christmas week fell more than expected to 432,000. This is the lowest number of first time claims since July 2008. The prior week’s number was revised higher from 452,000 to 454,000. Continuing claims also fell breaking below 5 million to 4.981million, the lowest level since February. Somewhat offsetting this positive data was the extended benefits which rose 199,000 to 4.82million. It appears market participants are more focused on the initial and continuing claims as the fixed income sector did move considerably lower following the release.
Reports from fellow mortgage professionals indicate lender rate sheets are slighty worse than yesterday thanks to the early morning weakness following the jobless claims data. The par 30 year conventional rate mortgage remains in the 5.00% to 5.25% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount broker fee.
I hope everyone has a safe New Year’s eve, please do not drink and drive. As for me, I will be spending the night in front of my television watching Va. Tech playing Tennessee in the Chick-Fil-A Bowl. Go Hokies!!!!!
The fixed income market is set for an early close today at 2pm eastern and will be closed all of tomorrow in celebration of the New Year.
The final piece of economic data comes from the Department of Labor with the release of the weekly jobless claims. This report totals the number of Americans that filed for first time unemployment benefit in the prior week. Included within this report are two other measures, continuing claims and extended benefits claims. Continuing claims totals the number of Americans that continue to file for unemployment benefits due to a lack of finding a new job. The extended benefits claims totals the number of Americans who’ve used up their traditional benefits and are now collecting extended payments under recent government stimulus programs. Recent reports have shown both the initial claims and continuing claims falling while the extended benefits measure continues to rise. After peaking over 650,000 first time claims in March of this year, initial claims have steady improved falling to only 452,000 two weeks ago. Economists surveyed expect a slight increase in claims to 455,000 for last week.
The release indicated the number of Americans that filed for first time claims during the Christmas week fell more than expected to 432,000. This is the lowest number of first time claims since July 2008. The prior week’s number was revised higher from 452,000 to 454,000. Continuing claims also fell breaking below 5 million to 4.981million, the lowest level since February. Somewhat offsetting this positive data was the extended benefits which rose 199,000 to 4.82million. It appears market participants are more focused on the initial and continuing claims as the fixed income sector did move considerably lower following the release.
Reports from fellow mortgage professionals indicate lender rate sheets are slighty worse than yesterday thanks to the early morning weakness following the jobless claims data. The par 30 year conventional rate mortgage remains in the 5.00% to 5.25% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount broker fee.
I hope everyone has a safe New Year’s eve, please do not drink and drive. As for me, I will be spending the night in front of my television watching Va. Tech playing Tennessee in the Chick-Fil-A Bowl. Go Hokies!!!!!
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